MANAGEMENT PRINCIPLLES

AND APPL
9.6
represents the shared beliefs, values.
(vii) Organisational Culture. It things that influence the work
traditions and ways of doing culture of a business is of
LICATIONS
behaviCustouroms, rituals
ENVIRONMENTAL ANALYSIS AND DIAGNOSIS

Oroinsation's Insiders cum Outsiders. They include different groups of

Supplying capital or occupying individuals
9.7

working in the firm. Open and dynamic

implementation of management decisions, policies
and plans effective
instrumentpeoplal e (
and are likely to have derent positions or working in the organisation
great intluence on the organisation.
Øwners : They are the shareholdeS groups or
organisations who have a major
stake in the company as suppliers of hnance. They have a vested iinterest in the
9.4 MESO ENVIRONMENT well-being of the company.
operating on a business at theintermediatee or
Meso cnvironment consists of all external forces (ii) Beard of Directors : The board of directors elected by the shareholders and is
level: In other 1words, it is the setting between micro involves analysis of
forces operating
industry
enpironment and macro environment of a business. harged with overseeing the general management of the company to
is being run in a way that best serves the shareholders interests. ensure that it
An understanding of meso level environment Suppliers, and at the
These forces have direct impact on the firm's market and distribution channels.
industry levet including customers, clients, competitors, s operations, It is to be nels,
hat
(ii) Eyployees : Employees are the people who actually do the work in the organisation.
Ihey are the major force withing the organisation. It is important for the
meso environment has its impact on both the business firm and other
firms that it that employees embrace the same values and goals as the organisation. Iforganisation
they work
vith. However, the meso forces may not influence all the firms in a particular industry in
towards different goals, the effectiveness of the organisation is impaired.
may be entirely differon n
the same rhanner. For instance, a firm's supplier environment 4. Market. The market is larger than customers. The market is to be studied in terms
Jthat of another firm which has arrangements for in-house supplies. of its actual and potential size, its growth prospect and also its attractivenes. The marketer
Meso environment is related to the immediate periphery of a business fim and should study the trends and developments and the key success factors of the market he is
lto be watched closely because, of its direct influence on the business. Meso forces o operating. The important issues are :
under the influence of macro forces including economic, social, political, legal, technoloc: (i) Çost structure of the market.
and international environment. (i) The price sensitivity of the market.
Elements of MesoEnvironment (i), Tehnological structure of the market.
(ivThe existing distribution system of the market.
Organisations have toclosely analyse and monitor the following elements of meso environment 5. Sappliers. Suppliers form an important component of meso environnment of any
in order to Stay competitive business fírm which is dependent on them for the supply of materials, equipment services
| KConsumers/Customers. According to Peter Drucker, the aim of the business is to create and so on. Large firms rely on multiple suppliers to maintain their production activities. A
etain customer. Customers are the people who pay money to acquire an organisation's busines firm has to explore alternative suppliers for economy in procurement and ensuring to
products or services. The organisation cannot survive without customers. Customers may or continuous supply in future. Another important decision that the firm has to take relates
may not be consumers. Consumer is one who ultimately consumes or uses the product or outsourcing vsn-house production depending upon the supplier environment.
service. A father may buy a product as a customer for his daughter who wvill be a consumer. of marketing
6 Intermediaries. Business firms are generally dependent on a number Intermediaries
A consumer occupies the central position in the marketing environment. The marketer has the customers.
intermediaries in promoting, selling and dirtributing its products to producers
to find answers to the following questions : and the consumers.
like agents, wholesalers and retailars establish a link between the
n i ) Who are the customers/consumers ?
Frms engaged in transportation, warehousing etc. thehelp in the physical distribution of goods.
1G0 What benefits are they looking for ? Marketing rerearch agencies help in understanding needs and expectations of consumers, and
(iiy Ahat are their buying patterns ? advertising agencies help in promoting products. Thus, efficient management of relations
the firm's
success in marketing of goods and services.
Competitors. Competitors are other business entities that compete for the resou with the marketing intermediaries is necessary for
we as market. A study of the competitive scenario is essential for the marketer, 7. Regúalators. Most of the business firms have to interact with a number of regulatory
particulary the type of industry they are in. Such
to understand threats from competition. The following guestions need to be addresSseu bodies-úbiect to the nature and volume of business and compliance with the concerned laws,
analysing competition : been created by the government to monitor
DOdies have authorised to control the
state and national levels. They are
)who are the competitors ? uies and regulations at the local, instance in India, business
under their respective purview. For
i hat are their objectives and strateges. Poncies and practices of the firms
(iii) Who are the most IS regatated by,the fottowirg autorites : registration of companies and compliance with the
aggressive and powerful competitors ? (1 Begistrar of Companies for the
Competition may be direct or indirect. Direct competition is between th¹ firms, which provisions of the Companies Act,
1913 by them.
are in same business activity. At
the same time, example, competition between firms
for ensuring fair
competition between a holiday resort and car- competition can also be indirect. For () Competition Commtsston of India (CCI) practices.
discretionary unfair trade
income of affluent customers is indirect manufacturing
company for available Lin each industry and checking
competition.
 MANAGEMENT PRINCIPI ES AND

9.8
APPLICATK
Securities and Exchange Board of India (SEBl) for the regulation of issue sSecurities
securities at the
stock exchange.
and fair trading in India (IRDAI)
of
by the corporate
sector
Development Authority for
r (iyy
Insurance
the
Regulatory and
operations of Insurance companies.
of India (TRAI) for regulating the activities
of the
regulating
Telecom Regulatory Authority
bY companiesin telecom sector. (FSSAI) for sppecification of
Authority of India compliancehy.
Food Safety and Standards
standards of food items and for ensuring heir the unitS safety
(Zand quality food items.
producing various
9.5 MACRO ENVIRONMENT that have the potential to
remote) factors infuenz
be defined as the general (or
economic, social, clutural political,
may
Macro environmentbusiness firms. Such factors
include words. they are
control. In other
the working of all
technological forces over which
a firm has no bevond
and firm. a specific firm bv
to influence as indirect
the control of
Macro
the business
environmental forces have
the potential
they are also
known
direct
action elements influencing
environmental forces. That is why,cases, macro forces may have influence
the meso environment. However, in some in the
house is affected directly byonthea changes impor
or remote import forces business firm depends
their operations. For example,anextent of influence of macro threats and
Governement. The
operation. They can
create both opportuniies
policy of the of may be categorised as fllows :
on its size,
nature and area of macro
environment
firm. The Components
for the business
(i) Economic environment
(ii) Political environment
(iii) Legal-regulatory environment
(iv) Socio-cultural environment.
(v) Technological environment.
(vi) International environment. historal
under the influence of ecological and
also operates
Besides these, a business the purview of the present book.
environment which are outside

Political Economic
Environment Environment

Socio-Cultural
BUSINESS
Legal Regulatory Environment
ENVIRONMENT
Environment

International
Technological Environment
Environment

Fig. 9.3. Elements of Macro Environment.